EHedger Closing Grain Commentary 3/7/11

Published on: 14:41PM Mar 07, 2011

It was a slow start to the week as corn, wheat, and beans all settled lower on Monday. May corn settled 10 ¾ cents lower at $7.17 ½ while December corn settled 1 cent higher at $6.10 ½. May soybeans settled 19 cents lower finishing at $13.95 and new crop November beans settled 6 ¼ lower at $13.54 ¾. Chicago May wheat settled 31 ½ cents lower at $8.00 ¾  while December settled 22 ¾ lower at $8.80 ¼.

 Before the markets opened this morning the USDA announced the sale of 150,000mt of corn to Mexico and also 300,000mt of wheat to Iraq. Also announced this morning was the end of the port workers strike in Argentina.  This coupled with the improved weather for the Chinese wheat growing areas as well as better than expected forecasts for the US Plains all contributed to the sell-off that we saw today.

Export inspections were lower than expected for beans this morning, corn exports were solid, and wheat was in line with estimates. The USDA Supply/Demand and Production report will be released on Thursday morning at 7:30am. The trade still seems to be focused on the March 31 acreage report.  The consensus is that beans are going to receive the short end of the stick in the acreage battle, which has been providing support to the bean market.   However, if we do see large production numbers confirmed out of South America this should take some pressure off the US and potentially help offset a lower acreage number. As we saw today it wouldn’t be a huge surprise to see some lightening up of positions as traders wait for Thursday’s report.

Despite the setback in the markets today we are still at highly profitable levels for most producers.  For those producers who are behind on cash sales we continue to recommend getting caught up before Thursday's report and re-owning the market using bull call spreads.  Each producer should plug this strategy into their AMMO program to see how it would affect their farms profitability. If you have any questions please don’t hesitate to give us a call and we will be more than happy to assist you. 


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